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Table 1 : Investment Statistics (WASEONG; Code: 5142) Bloomberg: WSC MKNet Basic FD FD EPS FD NetFYE Turnover profit EPS# EPS# Growth PER C.EPS* P/NTA P/CF Gearing GDYDec (RMm) (RMm) (sen) (sen) (%) (x) (sen) (x) (x) (x) (%)
2009 1,950.3 121.3 17.7 14.2 45.2 15.1 - 1.9 5.2 0.3 3.52010f 1,607.3 74.4 10.5 8.5 (40.3) 25.4 12.0 1.9 57.0 0.4 1.52011f 2,201.1 121.3 17.0 13.8 62.5 15.6 16.6 1.7 4.5 0.4 2.42012f 2,340.1 139.7 19.6 15.9 15.2 13.5 18.8 1.5 6.3 0.4 2.7
Main Market Listing / Trustee Stock / Syariah-Approved Stock By The SC * Consensus Based On IBES Estimates
Coalbed methane (CBM) projects win environmental approvals.
The Upstream online on 22 Oct mentioned that
both the Gladstone LNGand Queensland Curtis LNG had won final environmental approvals. Thisclears the way for final investment decisions (FID), expected by the end of 2010. Both projects are purported to be worth around A$30bn(RM91.7bn).
Improved visibility on projects.
In our last update, Wah Seong’smanagement guided that they had limited visibility with regards to awardtimelines for the Australian coal seam gas (CSG) projects. As such, theturn of events is positive. Going forth, if both projects are given the goahead in Dec, the likelihood of awards for the pipeline portion of theproject in FY11 is good. Recall, the awards for the Gorgon project wasreceived in Oct 09, just about a month (Sep 09) after the FID.
Information on Gladstone LNG
The GLNG project is a joint venturebetween Australian company, Santos (45%), Petronas (35%) and Frenchcompany Total (20%). The project involves a 435 km gas pipeline from thegas fields to Gladstone. Santos expects to reach a final investment decision(FID) on the first train by the end of 2010, while the FID for the secondtrain is expected to follow in 2011
Information on Queensland Curtis LNG (QCL).
The project involves a540km buried natural gas pipeline network linking the gas fields toGladstone and a natural gas liquefaction plant on Curtis Island.Queensland Curtis is planned to be a two-train project producing 8.5 mtpaLNG.
1) Prolonged delay in E&P spending beyond FY11; 2) Slower-than-expected economic recovery; and 3) Cancellation of pipeline projects(especially those in Australia).
We maintain our forecasts at this juncture as theenvironmental approval does not have any earnings impact as yet.
While FY10 looks to be a watershed year, we believethat the turn of events signal that prospects down-under are improving. Assuch, Wah Seong’s outlook is also beginning to look more positive.Notwithstanding our concern on the near-term contract flows, the longer-term positive outlook will now likely provide support to the share price.Therefore we upgrade our call on the stock to a
while ourfair value is raised to RM2.21 based on 16x FY11 EPS (vs. 13x previously).
Wah Seong Corp
Gladstone and Curtis LNG Projects Contract GetEnvironmental Green Light
25 October 2010
Share Price : RM2.15Fair Value : RM2.21Recom :
Please read important disclosures at the end of this report.
RHB ResearchInstitute Sdn Bhd
A member of theRHB Banking Group
Company No: 233327 -M
Issued Capital (m shares)723.9Market Cap (RMm)1,556.5Daily Trading Vol (m shs)1.152wk Price Range (RM)1.99-2.83
Major Shareholders: (%)
WST Trading Co 30.5EPF 7.8KWAP 6.0Midvest Asia S/B 5.7
FYE Dec FY10 FY11 FY12
FD EPS chg (%) - - -Var to Cons (%)(23.4) (13.0) (12.5)
PE Band ChartRelative Performance To FBM KLCI
Yap Huey Chiang(603) firstname.lastname@example.org
M a l a s i a
M A R K E T D A T E L I N E
P P 7 7 6 7 / 0 9 / 2 0 1 1 ( 0 2 8 7 3 0 )
Wah SeongFBM KLCI
PER = 25x
PER = 20x
PER = 15x
PER = 10x